Callouts & quotes from 575+ activist slides

"We believe that Remitly is dependent on keeping the perceived value of its equity high because it is among the most aggressive issuers of stock-based compensation at 12% of revenue and 78% of operating cash flow."

"The Income Statement tracks profitability while the Cash Flow Statement tracks cash movements. The Cash Flow Statement bridges Net Income, which is the punchline number from Income Statement, to actual cash flow."

"After appropriately valuing its high quality franchise and real estate cash flows, even “unfixed” Wendy’s is worth $35 today. If the Company improves its company-operated store margins, the business is worth $42"

"Lasertec is an extreme, textbook accounting fraud that checks off every box: claiming to have the highest margins in the industry; but alarmingly little cash flow and the lowest cash conversion among its peers."

"GFL's capex listed through the cash flow statement does not reconcile with capex additions through the PP&E accounts. As a result, we believe capex is being capitalized on the balance sheet by at least C$41.1m"

"Assuming Valeant de-levers and maintains 3.5 turns of leverage, allocates free cash flow to acquisitions, and grows at a rate reflective of the strength of its franchises, the stock is tremendously undervalued"

"High fixed interest rates payments risk incentivising Management to bid uneconomically for short-term cash flow at significant long-term risk to shareholders, especially since Management owns very little stock"

"Assuming Valeant de-levers and maintains 3.5 turns of leverage, allocates free cash flow to acquisitions, and grows at a rate reflective of the strength of its franchises, the stock is tremendously undervalued"

"From local filings, we see that its EBITDA margin has fallen sharply over the past three years from 7.8% to 3.9% (Adj EBITDA from 8.2% to 6.0%), while operating cash flow amounted to just A$3 million in 2022."

"High fixed interest rate payments risk incentivising Management to bid uneconomically for short-term cash flow at significant long-term risk to shareholders, especially since Management owns very little stock"

"Spruce Point observes that Philip Services Corp. also understated its Capex through the cash flow statement after completing its IPO in the U.S. and Canada. The stock eventually collapsed towards insolvency."

"Looking carefully at AMR's equity account statement and stock repurchase footnotes, we see it repurchased $23.84m of stock in Q1 2022. Furthermore, it recorded $3.03m of inflows from warrants being exercised"

"we are proposing that TI adopt a dynamic capacity-management strategy and introduce a free cash flow per share target of $9.00+ in 2026, representing a level that is ~40% above current investor expectations."

"As the discrepancy between accounting income and cash flow widens, funding the dividend becomes tricky – consensus earnings estimates for 2025/2026 imply a dividend that is unrealistic vs. cash or cash flow."

"We are alarmed by the Q1'25 surge in accounts payable, which cannot be explained by the Ambry acquisition which included just $0.2m of additions. Tempus may be stretching out payables to generate cash flow."

"Twist hypes its chip but is less than candid on a critical point: it’s only used for the first step in a long manufacturing workflow, and the remaining steps are the same as any commodity DNA manufacturer."

"This undrawn facility amount has decreased RMB 6.25 billion over the last six months to RMB 4.98 billion, which is somewhat alarming since the company supposedly generated free cash flow in that same time."

"Note: Our Free Cash Flows are derived using Net Capital Expenditures, net of proceeds received from closures. We note that the Company typically generates $300 - $400mm of proceeds annually from closings."

"We are unable to reconcile certain balance sheet and cash flow statement accounts. The balance sheet accounts show additions that are €24.8 million greater than what the cash flow statement seems to show."

"Bunge is a cash incinerating agribusiness roll-up which we estimate has a cumulative cash flow deficit of ($1.6bn) since 1999 while distributing $4.7bn and $3.9bn towards dividends and share repurchases."

"HHH will be a well-capitalized company with access to equity and debt capital and excess free cash flow from HHC, which will be reinvested in high-return, controlling investments in operating businesses"

"A seven-year extension of GGP’s secured and unsecured loans at their existing interest rates would provide the Company with sufficient time to use cash flow from operations to delever its balance sheet."

"CTO is Obscuring the Fact that Their Core Cash Flows from Operations Have Never Been Enough to Cover Their Dividend and Pay for Recurring Capex with an AFFO Metric That Is an Aberration from Their Peers"

"Because prisons are made of concrete and steel, depreciation expense meaningfully exceeds maintenance capex. As a result, CXW’s free cash flow per share is substantially greater than earnings per share"

"Non-GAAP adjustments to Operating Cash Flow were conveniently just enough to push Non-GAAP Operating Cash Flow beyond management's comp target threshold of $230M (which it did not meet on a GAAP basis)"

"Result is Hess is penalized twice: Penalty #1: Multiple-based valuation undervalues Bakken; Penalty #2: Hess given lower multiple than peers due in part to higher capital intensity and cash flow gap."

"AOL's EBITDA growth ranked lowest among its peers and free cash flow growth was near the lowest quartile, while its CEO and CFO bonus payouts ranked in the 83rd and 96th percentile compared to peers."

"We estimate that the company will fall short of 2022E revenue and EBITDA by 35%, while we estimate that Levered Free Cash Flow in 2022E will be $74.3 million, or 80% lower than what forecasts imply."

"With Axon's cash flow going negative in Q1, its adjusted free cash flow over the last year is jut $4.9 million. Axon's valuation looks expensive relative to its declining and meager free cash flow."

"With the capital spending behind them, starting in 2023, depreciation will exceed capital spending, leading to even higher Free Cash Flow per share. So, it may be at 4.6x cash flow at $4.50 copper."

"From 2009 to 2011, AOL's revenue declined nearly twice as fast as total operating expenses, causing EBITDA and free cash flow to decline by a staggering $700 million and $575 million, respectively."

"DGW’s auditor was clearly inattentive in not seeing that DGW had misclassified property deposits in the cash flow statement in a way that artificially boosted its pre-IPO year operating cash flow."

"We believe HIMS does little to provide investors with adequate visibility on its various financial flows. In fact, the Company often seems at a loss to even describe it correctly and consistently."

"Magnite's Pro Forma operating cash flow declined -143% YTD 2019 vs 2020 and this assumes zero cash burn contribution from Telaria in Q1 2020, a period that it did not disclose separate financials."

"RTC Plan calls for Crown Castle to achieve a capex revenue ROI in excess of 40% on annual fiber discretionary capex of $600M (versus $1.4B), which turns fiber into a cash flow generative business"

"Globant’s lack of cash flow generation from its core operations, decelerating organic growth, and potentially misleading claims by management are all reflected in our choice of its multiple range"

"Two material weaknesses, costs exceeding expectations, worsening working capital, and aggressive cash flow interpretation but insiders (notably the CEO/CFO) got paid very nice short-term bonuses."

"USCR's former CFO outlined expectations for continued EBITDA to Free Cash Flow expectations of 60% in late Oct 2016. Ever since making that forecast, USCR has fallen increasingly short of target."

"HHC’s three integrated business segments allow it to self-fund the equity required for development from (i) MPC land sales, (ii) cash flow from its operating assets, and (iii) equity in the land"

"Most analysts value Pioneer through shorthand methods like a multiple of EBITDAX. We think the proper valuation is a long-term discounted cash flow of the resource opportunity. So we built one."

"At the risk of this report seeming to be a love letter to Jay Brown, we quote him regarding the incompatibility of the REIT structure with the risks of emerging and frontier market cash flows."

"Avery is expensive relative to its specialty chemical and materials peers, even before our adjustments to its enterprise value for added debts, and normalization of EBITDA and Free Cash Flow."

"The stock price reflects concern about ballooning capital costs, chronic lack of free cash flow, a high oil price breakeven, and recent difficulty executing against guidance and expectations."

"By reclassifying WSP's net financing expense as an operational cash flow as opposed to a financing cash flow, we find that the Company's operating cash flow margin lags the industry average."

"For FTAI to realize AP EBITDA through cash flows from operating activities (CFO) it must invest 101% of the book value of Inventory after the inventory is transferred from Leasing Equipment."

"Based on peers, we conclude that there are potentially material opportunities to improve ADT's cost structure as a standalone public company, enhancing both EBITDA margins and free cash flow"

"Based on SMCI's disclosures, we estimate its Q1 interest expense should have been $2.3 million vs. the $4.0 million cash interest expenses reported at the bottom of its cash flow statement."

"AOL should maintain an investment grade rating with leverage of $4.8 billion, representing 2.5x 2005E OIBDA and 2.8x 2005E OIBDAR, based on both its expected cash flows and perceived risks."

"More concerning though, Matanya’s cash flow statement, which shows all movements from its inception on December 17, 2017 through December 31, 2018, shows zero lending or borrowing activity."

"In frauds there is a limit and eventually the bubble must burst - one cannot outrun the fundamental accounting equation between the income statement, balance sheet, and cash flow statement."

"These companies' stock prices have dramatically outperformed their competition because traditional multiple-of-earnings or cash-flow based valuations do not properly reflect Platform Value"

"While Enfusion's recent 2024 revenue and Adj. EBITDA guidance came within market expectations, its new Free Cash Flow (FCF) conversion guidance implies a shortfall of FCF vs. expectations."

"When combined with the improved free cash flow generation of Dollar Tree and improved capital allocation policies, we believe Dollar Tree could ultimately be worth $150 per share or more."

"We believe the combination of underspending on capital expenditures and R&D has benefited PBH’s historic cash flow but will result in increasing financial struggles as acquisitions stall."

"We see no reason why and believe it will ultimately revert to its long-term average as investors cope with more disappointment with SCMI's inability to generate recurring free cash flow."

"TWX on a consolidated basis trades at a discount to the free cash flow multiples of other diversified media companies despite the fact that TWC contributes limited free cash flow to TWX."

"There are two critical points to make about Olam’s negative goodwill. First, negative goodwill is not “real” income in that there is no positive cash flow associated with it when booked."

"Capital leases have the main effect of inflating EBITDA and Free Cash Flow, two key measures investors used to value USCR. More importantly, management's bonus is tied heavily to EBITDA."

"In contrast, after a decade both Nvidia and Tesla had already reached $2 billion in revenue (more than 2x TEM's revenue) and both were able to have at least one cash flow positive year."

"Again, we are left to wonder whether Vitek’s investment objectives in Dubai did not involve the servicing of very special customers including those with hot flows of questionable money."